New York Sues Coinbase, Gemini Over Unlicensed Betting Markets

New York Attorney General Letitia James filed lawsuits in state court against Coinbase Financial Markets and Gemini Titan, alleging the platforms operated prediction markets in New York without the licenses required by state gambling law. The complaints seek disgorgement of alleged unlawful profits, restitution to users and an order barring the products from being offered to people under 21.

The filings say the exchanges did not register with the New York State Gaming Commission before offering markets that let users wager on outcomes tied to elections, economic indicators and other measurable events. The state contends those products meet the statutory definition of gambling and that the platforms failed to obtain required approvals.

James wrote in a statement, “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution.” The complaints ask the court to require the platforms to return proceeds the state says were earned unlawfully and to provide restitution to affected users.

Federal regulators have also weighed in on prediction markets. The Commodity Futures Trading Commission has argued it has exclusive authority over some of those markets and has challenged state regulation in court. Some operators have sued states, arguing state authorities lack power over markets that the CFTC has approved.

Cryptocurrency exchanges and smaller platforms have introduced prediction-style products in recent years. The New York lawsuits add to ongoing enforcement and litigation across several states. Court proceedings will determine whether New York’s gambling laws apply to the products and what remedies, if any, will be imposed.